Japan's Prime Minister Shinzo Abe resigns for health reasons - what next?
On Friday 28 August 2020, Japan’s Prime Minister Shinzo Abe held a press conference. Along with a review of his administration’s response to the global coronavirus pandemic, the PM announced his resignation due to deterioration in a chronic health condition. Although several recent hospital visits had given rise to speculation in the days prior to the announcement, the timing nevertheless came as a surprise to political observers and financial markets alike. In this note we examine the legacy of Shinzo Abe’s premiership and have a look at what comes next for Japan.
In the near term, policy continuity is expected to a significant extent. Indeed, once financial markets overcame the initial shock, the reaction of Japan based assets has been muted. In the longer term, PM Abe has set a high bar for his successor in terms of ability to skilfully navigate geopolitical challenges and bring out lasting change in Japan.